ZIMBABWE Stock Exchange listed horticultural firm, Tanganda Tea Company said this week it will be expanding into more regional markets to improve profitability.
The plan, which was announced in a trading update for the first quarter ended December 31, 2023, followed improved packed tea exports to the Democratic Republic of Congo (DRC).
“Volumes have started to increase as constraining factors have eased and the cumulative variance has begun to narrow,” the firm said.
“Packed tea exports into the region grew by 100% in response to the company pursuing and supplying an opportunity that arose to penetrate the Democratic Republic of Congo.
“Sustainable market diversification will continue to be pursued to expand the regional market.
“Avocado and macadamia plantations, which are under precision irrigation, are looking healthy and the harvest of these crops will commence towards the end of the second quarter of the financial year,” it added.
Avocado and macadamia are Tanganda’s top exports, mostly into the European markets.
Zimbabwean firms have recently been looking at export markets to escape currency fragilities on the domestic market.
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The company said it would focus on cost management measures and improved efficiencies to curb the adverse impact of galloping inflation caused by the currency volatility.
“The operating environment is expected to remain volatile and complex due to continued inflationary pressures, currency instability, escalation of costs, and reduced consumer disposable incomes.
“Business welcomed the extension of the multi-currency regime to 2030 as this is expected to facilitate some stability within the economy,” Tanganda said.
It said demand for its products remained ‘relatively strong’ even in the wake of economic problems in Zimbabwe and regional markets.
Tanganda said the implementation of its diversification of regional markets was already bringing positive spinoffs for the business.
“The confidence from our customers and their support, including the value-addition projects in the pipeline for our plantation crops, will help in improving company profitability.”
The company’s revenue for the quarter under review declined by 9% to US$5 million from US$5,5 million achieved in comparative prior period.
“The late onset of the rains has adversely impacted bulk tea production resulting in a 19% decline in volumes to 1 986 tonnes, compared to 2 443 tonnes produced in the prior year,” Tanganda said.
“Despite the decline in production, bulk tea export volumes grew by 18% to 1 274 tonnes from 1 076 tonnes achieved in the previous year owing to improved logistical arrangements for more export shipments to be processed before the Christmas break.”
It added that packed tea sales volumes of 475 tonnes were 14% below 549 tonnes achieved in the prior year.
